United States Court of Appeals,

Fifth Circuit.

No. 92–4463

Summary Calendar.

Anthony G. GUIDRY, Plaintiff–Appellant,

v.

HALLIBURTON GEOPHYSICAL SERVICES, INC., Edison Chouest Offshore, Inc., and

Galliano Marine Services, Defendants–Appellees.

Nov. 6, 1992.

Appeal from the United States District Court for the Eastern District of Texas.

Before HIGGINBOTHAM, SMITH, and DeMOSS, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Anthony G. Guidry appeals from the district court's order enforcing the settlement reached

by Guidry and defendants Halliburton Geophysical Services, Inc., Edison Chouest Offshore, Inc., and

Galliano Marine Services. Guidry contends that the district court erred in finding that the settlement

agreement precluded any future claim for maintenance. We affirm.

I.

Anthony Guidry became ill in the course of performing his duties on the R/V Sea Star during

the summer of 1990. Guidry's illness was diagnosed as pneumonia and he remained in England for

treatment. Upon returning to the United States, Guidry's physicians found that his pneumonia had

been cured. Guidry later developed osteomyelitis, however, which his doctor attributed to the

pneumonia. On July 3, 1991, Guidry brought suit in United States District Court for the Eastern

District of Texas against Galli ano Marine Service, his employer, Edison Chouest Offshore, Inc.,

owner of the vessel, and Halliburton Geophysical Services, Inc., chartere r of the vessel . Gui dry

sought personal injury damages as well as maintenance and cure under the Jones Act and general

maritime law.

The case went to trial on February 5, 1992. At the close of Guidry's case, Judge Parker urged

settlement. During a meeting in chambers, the parties reached an agreement in the presence of JudgeParker. This discussion was not recorded. Guidry's counsel announced the terms of the settlement

in open court on February 6. Counsel indicated that the parties had settled the seaworthiness claims,

with the defendants agreeing to pay Guidry $125,000. Guidry's counsel then spoke of the claims

reserved under the agreement. He first stated that the "settlement does not in any manner affect the

Plaint iff's rights under the general marit ime law for maintenance and cure. His claim for maintenance

and cure is totally unaffected by this settlement." The following exchange then took place:

[Guidry's counsel]: And it is Plaintiff's understanding that it is the opinion of counsel for the

Defendant that insofar as this man's osteomyelitis of the chest area, t hat this—that future

payments will be paid either under the provisions—paid in accordance with—or paid under

the obligation of maintenance and c ure—under the cure obligation or paid by the

hospitalization insurance.

The Court: As I understand it there is some question about whether payment to date have

been covered by hospitalization policy which may or may not remain in effect.

[Defense Counsel]: That is true, Your Honor.

The Court: Is that right?

[Defense Counsel]: That is true.

The Court: Because plaintiff is no longer an employee, and there may be a question

depending on the provisions of the policy, whether they continue to cover him. If they do not

continue to co ver him, then his claim for cure for the osteomyelitis is unaffected by the

settlement, is that a fair statement?

[Defense Counsel]: That is a fair statement, Your Honor.

The Court: All right.

The district court dismissed the case without prejudice by re ason of set tlement on February 10,

retaining jurisdiction to reopen the action upon a showing that the settlement had not been completed.

Guidry received funds and closing papers from defendants on March 10. The release reserved

only Guidry's claim for cure. Guidry questioned the release's failure t o reserve future claims for

maintenance and filed a motion to enforce the settlement on March 27. After a conference among

the district court and counsel (also unrecorded), the court found that the settlement reserved Guidry's

cure claim but precluded any future claim for maintenance. The court ordered the settlement to be

enforced in accord with this finding. Guidry has appealed to this court.

II.The parties disagree on the appropriate standard of review. Guidry contends that the district

court's interpretation of the settlement agreement should be reviewed de novo. The defendants argue

that we may reverse only if we find that the district court's reading is clearly erroneous. We agree

with defendants that the oral settlement's ambiguity makes clear error review proper.

A settlement agreement is contract. I n re Raymark Indus., Inc., 83 1 F.2d 550, 553 (5th

Cir.1987). A district court's interpretation of an unambiguous contract is a question of law, subject

to de novo review. L TV Educ. Systems, Inc. v. Bell, 862 F.2d 1168, 1172 (5th Cir.1989); R aymark,

831 F.2d at 553. This standard applies to all unambiguous contracts, oral as well as written. F DIC

v. Mmahat, 960 F.2d 1325, 1328 (5th Cir.1992). Where an agreement is ambiguous, such that its

construction turns on a consideration of extrinsic evidence, the district court's interpretation is

reviewed for clear er ror. National Union Fire Ins. Co. v. Circle, Inc., 915 F.2d 986, 989 (5th

Cir.1990); R aymark, 831 F .2d at 553. The initial determination that the ambiguous nature of a

contract warrants the introduction of extrinsic evidence is itself a question of law. C ircle, 915 F.2d

at 989.

The district court apparently found the oral settlement ambiguo us and relied on extrinsic

evidence to determine that future claims for maintenance were precluded. Guidry contends that the

oral settlement unambiguously reserves his claim for maintenance as well as cure. We disagree. It

is true that the oral settlement contains one statement that clearly reserves both claims. S ee R. 2, p.

62 ("This settlement does not in any manner affect the Plaint iff's rights under the general marit ime law

for maintenance and cure. His claim for maintenance and cure is totally unaffect ed by this

settlement."). But such a provision cannot be considered apart from the rest of the agreement. S ee,

e.g., In re Continental Airlines Corp., 907 F.2d 1500, 1511 (5th Cir.1990) ("When interpreting a

settlement agreement a court should not read individual sections out of context to achieve a result

not originally contemplated by the parties"). Rather, the statement reserving both claims must be read

together with the exchange between Judge Parker and counsel that immediately followed. Viewed

in this manner, the meaning of the settlement agreement is by no means clear.

After stating that the settlement reserved claims for both maintenance and cure, Guidry'scounsel announced that the parties had agreed that treatment for Guidry's osteomyelitis would be

covered by "the cure obligation or paid by the hospitalization insurance." Judge Parker at this time

attempted to clarify this point in the agreement by offering what he believed to be a "fair statement"

of the matter: "If [the insurance policy provisions] do not continue to cover him, then his claim for

cure of the osteomyelitis is unaffec t ed by the settlement." This explanation received the assent of

defense counsel and the discussion concluded.

Defend ant s maintain that Judge Parker's comment either renders the oral settlement

ambiguous or establishes that the agreement reserves only the claim for cure. According to

defendants, the assertion that Guidry's "claim for cure

... is unaffected by the settlement" indicates that

his claim for maintenance is affected, that is, precluded, by the settlement. Judge Parker's comment

in their view constitutes a correction of Guidry's counsel's mistaken prior statement reserving both

claims. But it is also possible to read Judge Parker's st at ement in a way that does not contradict

counsel's prior reservation of claims for maintenance and cure. Since Judge Parker's comment

immediately followed a statement in which cure was the only claim mentioned, his omission of the

maintenance claim might not bear the freight defendants sugges t . One could contend that Judge

Parker was not correcting counsel's prior misstatement, but was merely responding to the particular

issue raised by counsel in the preceding statement. Moreover, one might argue that if Guidry 's

counsel's assertion that the settlement reserved both maintenance and cure was a total misstatement

of the agreed-upon terms, as defendants now claim, surely defense counsel or the court would have

corrected this error in a more direct manner. These two plausible interpretations of the transcript lead

us to conclude that the oral settlement agreement is ambiguous. It was therefore appropriate for the

district court to use extrinsic evidence as an aid in determining the intent of the parties.

Defendants st ress t he presence and participation of Judge Parker during settlement

negotiations in contending that his reading of the agree ment should not be di sturbed. We agree.

Where the interpretation of a settlement agreement turns on an evaluation of extrinsic evidence, a

district court's findings deserve great deference. This is especially true in cases where the court has

been intimately involved in the process. See, e.g., Raymark, 831 F.2d at 553.AFFIRMED.